Applying Daubert, Eastern District Judge John Gallagher permitted the plaintiff’s bad faith expert to testify in this bad faith case.
First, the court found the expert qualified to testify. He had 32 years of overall insurance industry experience, including 24 years as a claim handler. He had “reviewed the claims handling procedures of numerous Pennsylvania insurance companies, including the types at issue in this case.”
Second, the expert was found reliable. The court favorably weighed the expert’s personal knowledge and experience, along with his “referencing the regulations and standards governing the industry.” He had also served as a mediator, “and worked with lawyers and claims representatives regarding industry and regulatory standards.”
On this latter point, the court found it important that the expert relied upon Pennsylvania’s Unfair Insurance Practices Act (UIPA) and Unfair Claims Settlement Practices regulations (UCSP). “Although ‘a violation of the UIPA and UCSP is not a per se violation of the bad faith standard … whether or not [the company] has complied with applicable insurance statutes or regulations may be relevant as to whether [the company] has acted reasonably and/or deviated from industry standards.’”
Finally, Judge Gallagher found the expert testimony “fit”, because it would assist the jury. He considered the following factors, and made the following determinations:
- “The issue of whether an expert is warranted in a bad faith action is very fact specific to each case and dependent on the complexity of the material.” He relied upon Judge Munley’s 2014 Monaghan v. Travelers decision for this proposition, summarized here.
- “Here, the issues include whether the claims adjusting procedure was reckless or in compliance with industry standards and whether Defendant lacked a reasonable basis for denying Plaintiffs’ claim. Insurance issues such as these can be complex to a layperson with no insurance industry knowledge or background and the jury may find an expert useful.”
- The decision to admit such testimony is left to the trial court’s discretion.
- “Although ‘an opinion is not objectionable merely because it embraces an ultimate issue,’ Fed. R. Evid. 704 (a), ‘an expert witness is prohibited from rendering a legal opinion’ as to whether a party’s conduct comports with the law.”
- Judge Gallagher did agree with the insurer that some of the expert’s language went too far, but this problem could be remedied without precluding the expert’s report and testimony.
- Judge Gallagher was wary of any expert opinions that might sound like legal conclusions to a jury, and “could induce the jury to surrender its role to a party’s expert.”
- He ruled the expert could testify to matters helpful to the jury, however, “so long as he refrains from framing his opinions as legal conclusions.”
Date of Decision: December 29, 2021
Wagner v. The Progressive Corporation, U.S. District Court Eastern District of Pennsylvania No. 5:20-CV-05407-JMG, 2021 WL 6137027 (E.D. Pa. Dec. 29, 2021) (Gallagher, J.)